Uponor and KWH Pipe merge infrastructure businesses

HELSINKI, FINLAND (Sept. 21, 5:20 p.m. ET) — Uponor Corp. and KWH Group Ltd. have formed a joint venture that combine their pipe systems businesses, which have been hit by a slowdown as a result of the recession.

The venture, Uponor Infra Oy, will focus primarily on northern Europe. Both Uponor and KWH are based in Finland.

The new company is jointly owned by Uponor (55.3 percent) and KWH Group (44.7 percent).

Uponor’s infrastructure solutions business focuses on storm water and sewer systems. The business generated 2011 earnings before interest, taxes, depreciation and amortization (EBITDA) of 3.8 million euros ($4.9 million) and sales of 150 million euros ($194 million). The operations employ 516 and include two factories in Finland and one in Sweden.

KWH Pipe generated EBITDA of 7.4 million euros ($9.6 million) and sales of 234 million euros ($303 million). Operations employ 1,238, and include three plants in Finland, two each in Denmark and Canada and four other factories in Sweden, Poland, the Czech Republic and Thailand.

The deal is subject to regulatory approvals.

The companies said the JV is aimed to improving efficiency and profitability, and reflects the mutual interest of both companies to stay in the business.

“The industry landscape in this business segment in Finland and other Nordic markets has changed remarkably over the past several years, due to international and specialized domestic players having entered the market,” Uponor President and CEO Jyri Luomakoski said in a news release. “At the same time demand has suffered as a result of a prolonged global crisis.”

KWH Group President and CEO Peter H"glund added: “Uponor and KWH wanted to contribute to the challenging situation at hand together, and will establish a new structure that aims at a better capacity utilization and a sustainable development of the infrastructure business in the future.”